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IRS Adopts “Taxpayer Bill of Rights”

The IRS
on Tuesday released a “Taxpayer Bill of Rights” intended to
better communicate to taxpayers their existing statutory and
administrative protections.

Modeled after the U.S.
Constitution’s Bill of Rights and a document of the Organisation
for Economic Co-operation and Development, the 10 broad
provisions were announced at a news conference at IRS
headquarters in Washington by IRS Commissioner John Koskinen and
National Taxpayer Advocate Nina Olson.

In meetings with
the IRS’s employees nationwide since he became commissioner in
December, Koskinen said, he had been impressed by their
dedication to serving taxpayers and respecting their rights.

“But I also came to believe that we as an institution
needed to do a better job of communicating taxpayer rights to
the public and showing taxpayers how deeply we respect those
rights,” Koskinen said.

For Olson, the document
represents at least a seven-year-long legislative and
administrative effort. Repeatedly since 2007 in her annual
reports to Congress, Olson has recommended a taxpayer bill of
rights. Legislation by that title has been introduced several
times. A bill containing mostly the same language as that issued
Tuesday, H.R. 2768, would incorporate a bill of rights into the
Internal Revenue Code. It passed the House of Representatives in
July 2013 but has failed so far to reach the floor of the
Senate. Last year, in her annual report, Olson identified the
lack of a bill of rights as the No. 1 most serious problem
facing taxpayers and called upon the IRS to adopt one
administratively. Her office drafted the document adopted
Tuesday.

The IRS incorporated the rights into a new version
of Publication 1, “Your Rights as a Taxpayer,” which accompanies
IRS correspondence with taxpayers, including a large volume of
notices now going out regarding tax year 2013 returns. Koskinen
said the rights will also be posted in public areas of IRS
offices and communicated to employees. The IRS also published a
page on its website with the bill of
rights. The Taxpayer Advocate Service that Olson heads also
published webpages listing the rights and what Olson called
“crosswalk” explanations, examples, and links to
underlying provisions of the Internal Revenue Code, Internal
Revenue Manual, and other source materials. The rights are:

The right to be informed;

The right
to receive quality service;

The right to pay no
more than the correct amount of tax;

The right
to challenge the IRS’s position and to be heard;

The right to appeal an IRS decision in an independent
forum;

The right to finality (e.g., to know the
maximum time for challenging an IRS position, for being
audited, or when an audit is finished);

The
right to privacy (e.g., IRS compliance with laws and respect
for due process in inquiries, examinations, enforcements,
etc.);

The right to confidentiality of
information provided to the IRS;

The right to
retain representation; and

The right to a fair
and just tax system.

A survey by the Taxpayer
Advocate Service in 2012 found that only 46% of U.S. taxpayers
believed they had rights before the IRS, and only 11% knew what
those rights were, Olson said.

“If you don’t know what
your rights are, you will never avail yourself of those rights,”
she said. On the other hand, she said, “An educated tax consumer
is the most protected tax consumer.”

Koskinen and Olson
said they would continue to also seek a legislative enactment of
taxpayer rights. Koskinen said the document would also
underscore his continuing advocacy for budgetary resources for
the IRS to fulfill its protections.

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